Laundry washed-up without contracts

A commercial laundry in the Pilbara has been forced to abandon the business before it even opened, after failing to secure contracts with the resources sector.

MCM Linen was one of the first businesses to set up in the Western Australian Government's new Gap Ridge industrial estate in Karratha.

Director Alistair Murchison says mining companies were initially interested in doing business locally, instead of transporting their laundry to Perth.

He says in the end, no company was willing to do business with his $15 million venture, which was expected to employ about 50 local staff.

"Towards the end of the project, re-engaging with those clients, there was far more reluctance to execute any kind of contract which ultimately is what led us to putting the project on hold," he said.

"It was our livelihood and our blood, sweat and tears for the last two years.

"We put everything we absolutely could into it to make it a success."

Mr Murchison is now looking to sell up.

"It's very disappointing to read all this great stuff about catering companies and mining companies using local business and promoting green operations and all these ... benefits, yet we certainly found no-one was prepared to do that when push came to shove," he said.

The Karratha Chamber of Commerce and Industry says it is disappointing, considering local businesses are being urged to diversify to help the resources sector.

CEO John Lally says companies may already have long-term contracts in place.

"I presume MCM hoped that they would be able to break into those contracts but obviously they can't," he said.

"They can do it considerably cheaper, the fact that it's not being carted all the way to Perth and just from an environmental perspective, to do this work on site, up here in Karratha, is the obvious place to do it. It's quite upsetting.

"We're not going to diversify the economy in Karratha if everything's done in Perth, so that's what we want.

"We want workshops up here, we want storage up here, warehousing and we want businesses to diversify.

"Even if they're connected to the resources industry like this one, we need them to be operating in Karratha."